Exhibit 10.2
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE
AGREEMENT (“ Agreement ”) is made and
entered into as of the
day of
, by
and between Directed Electronics, Inc., a Florida corporation (the
“ Company ”), and
(the “ Executive ”).
Recitals
The Board of Directors of the Company
(the “ Board ”), has determined that it is in
the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the
Executive, notwithstanding the possibility, threat, or occurrence
of a Change of Control (as defined below) of the Company.
The Board believes it is imperative
to diminish the inevitable distraction of the Executive by virtue
of the personal uncertainties and risks created by a pending or
threatened Change of Control, to encourage the Executive’s
full attention and dedication to the Company currently and in the
event of any proposed Change of Control, to provide the Executive
with individual financial security and, in order to accomplish
these objectives, the Board has caused the Company to enter into
this Agreement.
Agreement
NOW, THEREFORE, in consideration of
the premises and mutual covenants set forth herein, it is hereby
agreed as follows:
1. Change of
Control
1.1 For
the purpose of this Agreement, a “ Change of Control
” shall mean:
(i) The
acquisition, at any time after the date hereof, by any person,
entity or “group”, within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”), of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either the
then outstanding shares of common stock or the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors; or
(ii) The
ten (10) individuals who, as of the date hereof, constitute
the Board of Directors of the Company (as of the date hereof the
“ Incumbent Board ”) cease for any reason to
constitute at least a majority of Company’s Board of
Directors; provided that any person becoming a director subsequent
to the date hereof whose election, or nomination for election by
the Company’s shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent
Board shall be, for purposes of this Agreement, considered as
though such person were a member of the Incumbent Board; or
(iii) Approval
by the shareholders of the Company of (1) a reorganization,
merger or consolidation with respect to which persons who were the
shareholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately
thereafter, own more than 50% of the combined voting power entitled
to vote generally in the election of directors of the reorganized,
merged or consolidated company’s (or entity’s) then
outstanding voting securities in substantially the same proportions
as their ownership immediately prior to such reorganization,
merger, or consolidation, (2) a liquidation or dissolution of
the Company, or (3) the sale of all or substantially all of
the assets of the Company, unless the approved reorganization,
merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.
1.2 For
purposes of this Agreement, “ Cause ” shall mean
(i) an act or acts of personal dishonesty taken by the
Executive and intended to result in substantial personal enrichment
of the Executive at the expense of the Company, (ii) repeated
violations by the Executive of the Executive’s
